Capital Expenditure

A payment to buy, build, improve or fix an asset (property that you own) which will last for more than one year. Capital expenditures generally can’t be deducted in the year paid. Instead, they must usually be added to your investment (adjusted basis) in the asset, then be written off (depreciated) over a longer period. Examples of capital expenditures include the costs to build a new building, add a new roof, build a new den, pay a broker for finding a tenant, and so forth.